NUEVO LAREDO, Mexico -- Heavily armed Mexican army troops and federal police guard the principal street intersections of this popular border town, a visible reminder of the Mexican government's campaign to quell a brutal, bloody battle between warring drug cartels.

Laredo police say 75 people were murdered during 2003 in Nuevo Laredo, population 309,000, and the majority of the killings appear to be drug-related. By contrast, down river in Matamoros, a border city with 376,000 residents, human rights observers reported six drug-related murders among the 46 homicides last year.

And in recent months, the violence has spilled across the Rio Grande to Laredo. In November, three men were gunned down in Laredo in contract killings now linked to the cartel struggle across the river, city police say.

The battle raging in Nuevo Laredo is for control of one of the Southwest border's most lucrative drug trafficking corridors, and Mexican drug smuggling organizations from the Pacific states are locked in a deadly faceoff with resurgent members of the Gulf Cartel, law enforcement officials say.

"Right now, it's kind of better," said Pablo Longoria, general manager of the landmark El Dorado Bar in Nuevo Laredo. "In the last two months, I've seen an increase in the tourism because of the security (President) Fox sent to the border."

In September, President Vicente Fox ordered hundreds of Mexican army soldiers and federal police to provide security in Nuevo Laredo. Troops and members of the gray-uniformed PFP, or federal preventative police, can be seen standing guard around Nuevo Laredo's plazas, outside city and state office buildings, banks and even grocery stores.

Violent increase

Longoria, whose family also owns the Cadillac Bar, said visitors who stay in the tourist center near the international bridges are safe.

"They (drug gangs) are doing these things to each other. They normally do their work at 4 a.m. in the streets, so most people are not in danger," he said.

The drug-related violence increased dramatically last March with the capture of Gulf Cartel kingpin Osiel Cardenas Guillen in a suburb of Matamoros, law enforcement officials say. Hundreds of rounds of automatic rifle fire crackled as Mexican military units fought a pitched battle with the trafficker's bodyguards on city streets, and Cardenas was whisked away to a federal prison in the Mexican interior.

But Cardenas' arrest, hailed as a major victory for Fox's anti-drug campaign, created an opening for other trafficking gangs, which are attempting to muscle into the Gulf Cartel's long-established smuggling routes to northern Mexico.

"It's a continued turf war with the capture of a couple of high-profile, very lucrative members of cartels who were prominent for quite a bit of time," said Laredo Police Chief Agustin Dovalina III. "And now we have the offshoots trying to take over, and they're trying to take each other out."

FBI agent Rene Salinas, a spokesman for the San Antonio office, said that even though the fight has bled into Texas, the FBI is not getting involved.

"Unless we determine it is, in one way or another, terrorist-related, the FBI considers it a local issue. We're mandated (by Congress) to work terrorist cases at this point," he said.

Killers for hire

The clash for control of trafficking routes through Nuevo Laredo has been particularly brutal in recent months.

Both cartels have employed military deserters and former state and federal police officers to work as contract killers and to guard their drug shipments.

The Gulf Cartel hired a group known as the Zetas, a reference to the radio call sign of their former military units. And rivals from the Pacific cartel based in Sinaloa have hired their own army of military and police deserters, known as Los Negros or "the black ones," dubbed as such for wearing dark clothing and driving black vehicles, according to a veteran federal agent monitoring the turf battle.

"The information we have is they're military deserters and ex-law enforcement who came together and formed that group. It's an enforcement group for hire," said Sgt. Alberto Sanchez, who heads the Laredo Police Department's intelligence section. "They have AK-47's and assault-type weapons. There was one report that one time they used a bazooka (in an attack.)"

Sanchez was referring to an early morning gun battle last August that erupted as a federal prosecutor in Nuevo Laredo was ambushed while leaving his residence, an assassination attempt by Los Negros. Federal agents who arrived on the scene battled heavily armed attackers, and one of the vehicles was demolished by a large explosion, possibly from a military projectile.

And while U.S. consular officials in Nuevo Laredo say no innocent Americans have been caught in the crossfire, the intensity of the drug war has terrified local residents.

Cornelio Reyes, a 43-year-old father of three girls, said his two youngest were on the way to a neighborhood store when they witnessed the murder of a young man shot to death by two gunmen.

Reyes, who owns a taco and sandwich stand on the outskirts of the city, recounted a narrow escape he had while dropping off two of his workers after closing his business at 2 a.m.

"I got caught in a shootout. I heard the gunfire, and looked up and there were two cars flying down the street and they were shooting at each other," he said. "The boys were yelling, `Get down! Get down!'

"I was really afraid because you don't even know how to react. All I could do was pull over to the side of the street and let them pass."

But even worse, Reyes explained, is not knowing who is who.

`There is fear'

"What is saddest is the bad ones, the guys who do the crimes, they dress like the police," he said. "One time I was looking outside and we saw these guys go by -- in Suburbans with signs that said `federal police' -- and they looked like federal agents. We said, `That's good, there is more security in town.' But we found out later they were criminals.

"People are really confused; there is fear in Nuevo Laredo, and they don't know what to do," he added.

One noted expert on drug trafficking believes a factor in the increased violence is the inability of drug lords to buy protection from law enforcement agencies under the Fox administration.

"The situation has been made more complex by the severing of pre-existing bribery ties between police agencies and the PRI (the previous ruling political party) and the various criminal organizations functioning in drug trafficking," said Bruce Bagley, professor of International Studies at the University of Miami.

"Their failure to establish new ones in the first three years of the Fox administration, their failure to get protection, is making it more dangerous" for the cartels, said Bagley, who recently returned from a one-year sabbatical in Mexico.

Michael Yoder, the U.S. consul in Nuevo Laredo, said residents wonder about what will happen when the Mexican government pulls out its security forces.

"The conventional wisdom in Nuevo Laredo is since these units that are attached to the PFP (federal police) arrived in September, it has had a beneficial effect in curbing violence in Nuevo Laredo and the surrounding area," Yoder said. "There is concern on the part of many people that they won't be here forever."

And one veteran federal agent predicts the warring cartels will simply move their trafficking routes to sections of the Mexican border where there is less scrutiny.

"The problem is when you get the army in one place, they (traffickers) shift somewhere else. So when you've got a place like Nuevo Laredo covered with army troops and federal agents, they move to somewhere else -- they're resourceful," the agent said. "You're going to see a bigger increase in violence in Reynosa and Matamoros, and Nuevo Laredo will go along but not as bad as last year."

And that will be fine with police officials across the Rio Grande in Laredo.